Dead

by Larry Levin

In my last missive I wrote "Although 'roll over' in the futures will continue through the week, a good deal of the volume is already trading in the December contract. The Labor Day vacation period is over. Rosh Hashanah is over. Roll over is essentially over. There are no more excuses to be made by Mr. Market as to why he wants to continue impersonating Rip Van Winkle. The coming weeks should be more lively..."

To be honest I was expecting the action to pick up today. It did not.

The market is still dead. Oh sure the S&P500 closed with a gain of +11.50 points, which is a good move, IF that move had occurred during the trading day. As (bad) luck would have it, the S&P500 opened at 1115.00 so the intra-day gain was a minuscule 1.25 from the opening bell.

I spoke with a friend this afternoon who remarked that today must have been a great day to trade; after all, the S&P, he said, was up roughly 12.00 points.

I told him that was about where it had opened. "Yeah, great day" Frank said.

I said, "Look, the market is dead. For the first 45-min the S&P traded in a range of just roughly 3.50 points. Then the next hour saw just a 2 point range! From there it fell somewhat."

"The market fell?" Frank said. "I thought it was up 12 points?"

"Oh jeeez" I thought. "A lot happens before the bell Frank, but sometimes not much at all like today. After the dip, the S&P traded in a pitiful range of just six ticks!"

Yep, Frank said it..."What's a tick?"

After I stopped giggling and shaking my head I said, "Never mind that Frank. The next three excruciatingly long hours, the S&P's range was roughly 2.75 points. That's like doing jumping jacks in you crawlspace dude: THERE'S NO ROOM!"

Although it seemed like Frank "got it" at that point he said "Well, at least the S&P ended up 11.50."

Maybe he missed the point entirely? Intra-day, the market is a rotting corpse: it is dead.

A bit later Frank asked "So what made the market go up?"

I told him about the new European banking rules known as Basel III that will eventually bring the European banking system back from insolvency..."but the regulators there are as spineless little weasels as they are here in the U.S. Congress. You see, the bankers get to kick the can down the road for EIGHT MORE YEARS. They do not have bring in their capital requirements until then, so it's another 32 fat quarters of bonuses for them when many should be out of business."

Frank said, "Oh that's good. Maybe things will be better then...and the S&P closed up 11.50"

What the %$#!...? "FRANK! Do you get special treatment like that? Before those 8-years are up ANY money injections will be from taxpayers even though the bankers made the bad decisions that caused the loss. If you had a business with money problems they'd tell you 'Sorry Charlie. Good luck on food stamps.' But not the banksters. Doesn't that bother you?"

"Well, I don't know what to think" said Frank. "But the S&P closed up 11.50."

"Oh boy" I said. "I have to go. I'll talk to you later."

Have you ever had a conversation like that? I wonder if the market in general is a bunch of "Frank's:" nothing matters as long as the market closes up.



Previous Day's Trading Room Results:

Trade Date: 9/13/10

E-Mini S&P Trades*
(before fees and commissions):


1) No "Secrets" trades filled today.

2) Algorithm positions (4)

3) “Reading the Tape” positions (2)…combined Secret’s, Algo, & “Reading the Tape” total… -0.25



Sign up as an AvidTrader Member to receive "The Technician" Value Area's each day. The market then has an 80% chance of filling the Value Area. Many traders familiar with the Value Area and the techniques that go along with it use it to help them decide what trades to do each day. Join and see how this technique can help you trade more successfully!